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2014 Supreme(AP) 1162
IN THE HIGH COURT OF ANDHRA PRADESH AT HYDERABAD
C. Praveen Kumar, J.
India Brewery and Distillery Pvt. Ltd. - Appellants
Vs.
R.K. Distilleries Pvt. Ltd. - Respondent
Criminal Petition No. 432 of 2013
Decided On: 14.03.2014
For Appellant/Petitioner/Plaintiff:N. Naveen Kumar, Advocate
For Respondents/Defendant:Public Prosecutor and Resu Mahender Reddy, Advocate
Headnote:
Criminal Law – Criminal Procedure Code, 1973 – Sections 482 and 305 – Negotiable Instruments Act, 1881 – Section 138 and 141 – Dishonoured of cheque – Sought for quash of complaint – Application accused company, namely, M/s. India Brewery & Distillery Private Limited, represented by its Managing Director was involved in supply of raw material i.e., rectified spirit and neutral spirit, which was being used for manufacture of alcohol – Complainant manufacturer is alleged to have approached the accused and placed an order for supply of extra neutral alcohol. Pursuant to an e-mail, the accused company issued a letter expressing its acceptance and willingness to supply the said material and accepted an amount of advance towards supply of the said material. Later the accused expressed inability to fulfill its obligation but assured the complainant to return the advance amount – Left with but no other option the complainant accepted the offer. Consequent upon the failure of the accused to repay the amount agreed upon, the complainant presented bearing each said when presented were returned with an endorsement Payment Stopped by Drawer –learned counsel for petitioner mainly submits that since the private complaint was filed only against a company, represented by its Managing Director, it is always open to the accused company to substitute a person to represent the company in the case – Held, Respondent company filed a private complaint against the accused company showing its Managing Director as the person representing the said company. He was not made an accused in his individual capacity though he was a signatory to Pursuant to an authorization given by the accused company one styling himself as a person representing the company filed an application to substitute his name as the person representing the accused company instead of its Managing Director said application was opposed by the first respondent herein stating that the Managing Director who is responsible for day to day affairs of the company alone has to represent the company – Under section 305 it is privilege of the accused company to any person of its choice to represent the accused company. Since the Managing Director of accused was not individually prosecuted and as company cannot be sent to jail, no prejudice would be caused to either of the parties if the accused is represented by a person by accused company – Argument of counsel that person who signed alone has to represent the company and not by a stranger who has nothing to do with the issuance of cannot be accepted – In a given situation if person who signs and shown as a person representing company dies prosecution against the company will not get abated – Steps have to be taken to substitute a person to represent company accused company has every authority to substitute a person of its choice to represent the company under section 305 – Even if the person who signed is made individually liable, still the accused company can be represented by a person of its choice – Criminal Petition is accordingly allowed.
C. Praveen Kumar, J.
1. Rejection of an application filed under section 305 Cr.P.C., made the petitioner/accused to prefer this present petition under section 482 Cr.P.C.
2. The facts in issue are as under: The accused company, namely, M/s. India Brewery & Distillery Private Limited, represented by its Managing Director Mr. Balkrishan Mankani was involved in supply of raw material i.e., rectified spirit and neutral spirit, which was being used for manufacture of alcohol. The complainant, who is a manufacturer of alcohol is alleged to have approached the accused and placed an order for supply of 8 lakhs litres of extra neutral alcohol. Pursuant to an e-mail, the accused company issued a letter dt. 2-6-2011 expressing its acceptance and willingness to supply the said material and accepted an amount of Rs. 2 crores as advance towards supply of the said material. Later the accused expressed inability to fulfill its obligation but assured the complainant to return the advance amount. Left with but no other option the complainant accepted the offer. Consequent upon the failure of the accused to repay the amount agreed upon, the complainant presented the cheques bearing Nos. 635855 and 635856 dt. 29-10-2011 for Rs. 100 lakhs each. The said cheques when presented were returned with an endorsement "Payment Stopped by Drawer". After complying with the statutory requirements, a private complaint was filed against the accused being represented by its Managing Director Mr. Balkrishan Mankani for an offence punishable under section 138 of the Negotiable Instruments Act, 1881 (for short "the NI Act").
3. Pending the said proceedings, the accused filed Crl. M.P. No. 3701/2012 under section 305 Cr.P.C., seeking permission of the court to permit one of its Directors by name Mr. Parasram N. Ramnani to represent the accused company in place of its Managing Director Mr. Balkrishan Mankani. By an order dt. 17-9-2012, the said application was rejected. Assailing the said order, the petitioner herein filed Crl. R.P. No. 326/2012, which was also rejected on 19-12-2012. Assailing the said order, the present criminal petition is filed.
4. The learned counsel for the petitioner mainly submits that since the private complaint was filed only against a company, represented by its Managing Director, it is always open to the accused company to substitute a person to represent the company in the case. In view of section 305Cr.P.C., he submits that it is prerogative of the accused company to substitute any person of its choice to represent the company.
5. Relying upon the judgment of this Court in Mohd. Isaq Gulani V.J. Rajamouli 2001 (1) ALT (CRL) 80 (AP) and B. Manipal Reddy v. State of A.P. 2000 (1) ALT (CRL) 217(AP), the learned counsel for the first respondent submits that the person who signed the cheque in discharge of debt alone has to represent the company and that the provisions of Section 305 Cr.P.C., are not applicable to the case on hand.
6. Section 141 of the NI Act states that if a person committing an offence under section 138 of the NI Act is a company, the person who, at the time of commission of the offence was in charge of, and responsible to the company for the business of the company and also the company shall be deemed to be guilty. Section 141(2) of the NI Act reads that if the offence is committed by the company with the consent or connivance of or is attributable to any neglect on the part of Director, Manager, Secretary or other officers, all of them shall be deemed to be guilty of that offence. But neither section 138 of the NI Act nor Section 141 of the NI Act contemplate as to who should represent the company when it is prosecuted alone or along with its Directors. In the absence of any provision under the NI Act, one has to fall back on Section 305 Cr.P.C., which reads as under:-
Procedure when corporation or registered society is an accused:
(1) In this section, "corporation" means an incorporated company or other body corporate, an
